Azul Celebrates Successful Negotiations with Partners and Announces Strengthened Financial Position

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Azul, Brazil's largest airline, has successfully completed negotiations with aircraft lessors and bondholders, securing significant financial agreements. The company has obtained commitments for US$ 500 million in new investments, with US$ 150 million to be funded immediately, US$ 250 million upon documentation completion, and US$ 100 million pending additional conditions.

The airline has renegotiated 98% of its obligations with lessors and OEMs, resulting in US$ 550 million in finalized agreements and potential debt reduction exceeding US$ 800 million. Azul expects a 15% capacity increase in Q4 2024, with eight new aircraft arriving by year-end. The airline will operate 43,300 flights during the Brazilian summer season, including 3,048 extra flights.

After being affected by several external factors, such as exchange rate fluctuations and challenges in the global aviation supply chain, Azul announces the completion of negotiations with aircraft lessors and the signing of a support agreement with its main creditors, establishing an enhanced financial position and unlocking further growth.

SÃO PAULO, Oct. 28, 2024 /PRNewswire/ -- Azul, Brazil's largest airline by number of flights and destinations, today announces the completion of agreements with its aircraft lessors and bondholders. This agreement secures an investment of US$ 150 million to be funded this week, an additional US$ 250 million following the completion of relevant documentation and another US$ 100 million once other conditions under negotiation are finalized. With such agreements signed, the company successfully advances on its clear and friendly process to strengthen its balance sheet and cash position.

"This announcement reflects the relationship and trust our partners have placed in us for over 15 years, demonstrating confidence in our business model and our company's cash-generation capabilities. We are convinced we will continue our expansion trajectory into the future," said John Rodgerson, CEO of Azul.

Azul has renegotiated 98% of its obligations with aircraft lessors and original equipment manufacturers (OEMs), resulting in about US$ 550 million in finalized agreements, which significantly reduce debt and improve cash flow. Additionally, the company has secured US$ 400 million in additional financing and is paving the way for an additional US$ 100 million, alongside a potential further reduction of its debt by more than US$ 800 million.

"Azul has been one of the only airlines globally that did not receive direct government support in recent years, nor did it file for court protection to manage its debts. Instead, we opted for amicable negotiations that yielded beneficial results for all involved. Thanks to the trust and respect we have garnered in the market, we will continue to be one of the strongest and fastest-growing airlines worldwide," concluded the executive.

Azul, which will receive eight new aircraft by the end of this year, expects a 15% increase in capacity in the fourth quarter of 2024. For the peak Brazilian summer season, from December 16 to February 2, the airline will offer 3,048 extra flights. In total, the company will operate 43,300 flights during such season, including new international routes.

About Azul          

Azul S.A. (B3: AZUL4, NYSE: AZUL), the largest airline in Brazil in terms of departures and cities served, offers 1,000 daily flights to more than 160 destinations. With an operating fleet of more than 180 aircraft and more than 16,000 crewmembers, the company has a network of 300 direct routes. Azul was chosen by Cirium (a leading aviation data analysis company) as the 2nd most punctual airline in the world in 2023. In 2020, Azul was awarded as the best airline in the world by TripAdvisor, being the first time that a Brazilian airline won first place in the Traveller's Choice Awards. For more information visit www.voeazul.com.br/imprensa  

 

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SOURCE Azul S.A.

FAQ

How much new investment has Azul (AZUL) secured in October 2024?

Azul has secured commitments for US$ 500 million in total, with US$ 150 million to be funded immediately, US$ 250 million upon documentation completion, and US$ 100 million pending additional conditions.

What percentage of obligations has Azul (AZUL) renegotiated with aircraft lessors?

Azul has successfully renegotiated 98% of its obligations with aircraft lessors and original equipment manufacturers (OEMs).

How many extra flights will Azul (AZUL) operate during the 2024-2025 Brazilian summer season?

Azul will operate 3,048 extra flights during the Brazilian summer season from December 16 to February 2, totaling 43,300 flights for the period.

What is Azul's (AZUL) expected capacity increase for Q4 2024?

Azul expects a 15% increase in capacity for the fourth quarter of 2024, including the addition of eight new aircraft by year-end.